A limited constitutional government calls for a rules-based, freemarket monetary system, not the topsy-turvy fiat dollar that now exists under central banking. This issue of the Cato Journal examines the case for alternatives to central banking and the reforms needed to move toward free-market money.

The more widespread use of body cameras will make it easier for the American public to better understand how police officers do their jobs and under what circumstances they feel that it is necessary to resort to deadly force.

Americans are finally enjoying an improving economy after years of recession and slow growth. The unemployment rate is dropping, the economy is expanding, and public confidence is rising. Surely our economic crisis is behind us. Or is it? In Going for Broke: Deficits, Debt, and the Entitlement Crisis, Cato scholar Michael D. Tanner examines the growing national debt and its dire implications for our future and explains why a looming financial meltdown may be far worse than anyone expects.

The Cato Institute has released its 2014 Annual Report, which documents a dynamic year of growth and productivity. “Libertarianism is not just a framework for utopia,” Cato’s David Boaz writes in his book, The Libertarian Mind. “It is the indispensable framework for the future.” And as the new report demonstrates, the Cato Institute, thanks largely to the generosity of our Sponsors, is leading the charge to apply this framework across the policy spectrum.

Search form

Archives: 01/2007

Hey, don’t look at us, we’re just Congress: that was Senator Joe Biden’s take on Meet the Press Sunday when asked about stopping the surge and winding down the war. As Senator Biden put it: “There’s not much I can do about it. Not much anybody can do about it. He’s commander in chief.” A little later, Tim Russert asked him, “Why not cut off funding for the war?” and Biden replied “I’ve been there, Tim. You can’t do it.”

In 1969, Congress’s ruling Democrats began to offer amendments to funding bills – often approved with Republican votes – to limit President Richard M. Nixon’s military alternatives in Southeast Asia. Although the Hatfield-McGovern amendment to cut off money for the war was defeated in August 1970, it accelerated Nixon’s steps toward Vietnamization of the fighting. And three years later, with withdrawal of U.S. forces having begun, Congress voted to cut off all funding for “offensive” military action, sealing the deal.

Some 20 years later, Congress used similar tactics to end our nation-building excursion in Somalia. A month after the Black Hawk Down incident, in the Defense Appropriations Act for FY1994, Congress used the power of the purse [.pdf] to “cut off funding after March 31, 1994, except for a limited number of military personnel to protect American diplomatic personnel and American citizens, unless further authorized by Congress.”

Of course, Congress is not about to start cutting off funding for the Iraq war anytime soon. To the extent that the new Congress invokes the power of the purse over Iraq, it’s likely to pursue an intermediate strategy of attaching appropriations riders to the funding it authorizes, passing the funding, but barring troop increases, for instance. What seems likely to happen with that strategy is that the president will take the money and ignore the strings. Consider the signing statement Bush issued while signing the Intelligence Authorization Act of 2005, summarized here by the Boston Globe

Dec. 23, 2004: [Congress] Forbids US troops in Colombia from participating in any combat against rebels, except in cases of self-defense. Caps the number of US troops allowed in Colombia at 800.

Bush’s signing statement: Only the president, as commander in chief, can place restrictions on the use of US armed forces, so the executive branch will construe the law ”as advisory in nature.”

Thus, in the president’s view, Congress cannot prevent him from using American troops in a shooting war with Colombian drug traffickers, should he decide that’s a good idea. His position is, in essence, shut up and pay, it’s my army and my call.

Faced with that sort of intransigence, those members who want an end to the war in Iraq are probably going to have to demonstrate their willingness not to pay. Of course, that strategy leaves one vulnerable to charges of undercutting the troops. (“Supporting the troops” apparently entails extending their tours and sending more of them to die in an operation that just about no one thinks will work). Clearly, sending the president a letter–as Speaker Pelosi and Majority Leader Reid just did–isn’t going to do it.

Pressure on funding pushed Nixon out of Ahab mode on Vietnam. It may be the only thing that can force this president to change direction in Iraq.

I realize I have already blogged about agriculture today, and normally I would spare you a second blog entry, but there has been an important development in agricultural trade circles. Canada has requested consultations (the first step in a full-blown trade dispute) with the United States over U.S. farm programs.

Specifically, the Canadians want to discuss the subsidies given to U.S. corn farmers, and the damage they did to other world corn producers because of price suppression effects. Enquiring minds in Canada also want to know more about the amount of trade-distorting support that the United States paid to its farmers overall in “certain years” (the press release doesn’t specify which).

It’s hard to say at this point what effect, if any, this development will have on the U.S. farm bill debate, or the WTO negotiations in the Doha round. But it would be a stupid brave Congress indeed that paid no heed to the WTO effects (in litigation or negotiation) of American farm subsidies when drafting a new farm policy. History has shown that the costs of farm welfare to consumers and taxpayers tend to get short-ish shrift when juxtaposed with the farm lobby, but firms facing possible retaliatory sanctions or failed market access ambitions as a result of an adverse ruling against the United States might carry more weight.

I’ve just been perusing the “Standards to Provide Educational Achievement for Kids” (SPEAK) Act. This is the bill, introduced by Senator Christopher Dodd (D-Connecticut) and Representative Vernon Ehlers (R-Michigan), that seeks to homogenize math and science education in America.

Dodd and Ehlers are to be commended for wanting to improve our schools, but SPEAK isn’t going to do that.

The bill’s preamble laments how the 50 curriculum standards laid down by our 50 centrally planned state school systems have fallen short of the mark. To fix this problem, it recommends central planning at the national level.

We have been inexorably centralizing control over the schools in this country for 150 years. We’ve gone from one-room schoolhouses overseen directly by the parents of the children who attended them to sprawling bureaucracies that consume half of the operating budgets of their respective states. We’ve gone from 127,000 school districts in 1932 to fewer than 15,000 today – despite a massive increase in the number of students.

Is anyone – ANYONE – arguing that this centralization of educational power has made schools better, more efficient, or more responsive to the needs and demands of families?

[crickets]

So how could anyone think that even more centralized planning – the most centralized planning we can possibly have in this country unless someone would like to turn the schools over to UN control – would be a good thing?

The most plausible explanation is that it is simply a triumph of wishful thinking over reason and evidence: “Maybe THIS time it’ll work!?!?”

There are, of course, a few more specific rationalizations embedded in the bill; some to help justify it, and others to make it seem less grossly incompatible with the liberal democracy we’re supposed to be.

On the justification front: SPEAK would ostensibly make it easier for students to transfer between states without finding themselves far behind or ahead of their classmates. This is like whacking your own hand with a hammer to distract yourself from a pounding headache. The only reason there is a problem with students transferring between states (or, for that matter, between schools within states) is that public schools started rigidly grouping students by age at the turn of the 20th century. It’s a pedagogically backward practice that was adopted for its bureaucratic simplicity, and competitive market schools often dispense with it, grouping students based on what they know and can do. Much easier to teach Calculus to a class full of people who all understand algebra, hmm?

On the rationalization front, the standards sought by SPEAK are referred to as “voluntary.” But voluntary for whom? Not for parents and students. It isn’t as though you’ll be able to walk into your local school and opt in or out. What the bill’s authors mean is that it would be voluntary for state school boards or state school superintendents. Once they decide, you, me, and Dupree don’t get a say.

America will start leading on the international education stage when it starts leveraging its strengths. We are an entrepreneurial nation that values individual liberty and recognizes the virtues of voluntary cooperation, competition between providers, specialization, and the division of labor. Instead of standardizing our schools and our kids, we should be energizing our education system with the same market freedoms and incentives that have made us a world economic power.

There are frequent complaints that U.S. income inequality has increased in recent decades. Estimates of rising inequality that are widely cited in the media are often based on federal income tax return data. Those data appear to show that the share of U.S. income going to the top 1 percent has increased substantially since the 1970s. A new study by Cato scholar Alan Reynolds shows that these claims are wrong in both their premises and their conclusions. In “Has U.S. Income Inequality Really Increased?,” Reynolds concludes, “There is no clear evidence of a significant and sustained increase in the inequality of U.S. incomes, wages, consumption, or wealth since the late 1980s.” Cato will also host an event on income inequality on January 11.

Cato’s Center for Trade Policy Studies is putting together its ideas for a sensible farm policy (the current farm bill comes up for renewal later this year). Needless to say, the Cato plan will look substantially different from the anachronistic, interventionist pork-fest that was the 2002 Farm Bill.

In the meantime, those interested in U.S. farm policy might like to check out the following links: today’s editorial in the Washington Post and an article by Jonathan Rauch in Friday’s National Journal. Both contain plenty of arguments for what is wrong with U.S. agricultural policy today and are best read on an empty stomach. For a good overview of the farm bill debate, this article by Catherine Richert (Congressional Quarterly) is a pretty good bet.

When Reagan education secretary Bill Bennett and the NEA start singing from the same hymnal, it’s time for a reality check. Both have now called for the federal government to promote uniform national curriculum standards, but neither has made a compelling case for doing so. Obviously, its important to set high standards for all students, but that does not mean that it’s a good idea to set precisely the same standards for every single child of a given age. Children are not all identical widgets who can be run along an educational conveyor belt and learn every subject at the same pace. The best thing we can do for our kids is to treat them as the individuals they actually are, helping them progress through their studies at the best pace they are capable of – and that pace is not going to be the same for every student.

The idea that the federal government should be dictating a single standard for what every child in America should be learning violates both liberal and conservative ideals. It is at odds with the progressive view that learning should be adapted to and guided by each individual student, and runs contrary to the conservative ideals of limited government and individual liberty.

To find a political tradition that really is compatible with this idea, you have to go back a ways. Hippolyte Fortoul, the education minister of Napoleon III, apparently liked to boast that he could pick up his watch at any time of the day and tell you what every high-school student in France was learning at that moment. So we’re taking our policy cues from 19th century French imperialists now?

More on why federal government education standards are a bad idea here.

One can’t swing a dead cat in Washington these days without hitting someone who’s ranting about how plug-in hybrid vehicles (part gasoline engine, part battery-powered engine, but rechargeable like a wall appliance) are the wave of the future. Of course, if they really were the wave of the future, there would be no need for ranting in Washington - automobile manufacturers would be busy making them as we speak. It’s only when corporate America is cool to an idea that the prophets turn to the taxpayer or the regulator. This illustrates Taylor’s law - “the commercial merit of any particular technology is inversely related to the degree of political tub-thumping heard in Washington for said technology.”

Which brings us to plug-in hybrids. Noted automobile engineers James Woolsey, Frank Gaffney, and Gal Luft, among others, have been going into overdrive of late to demand federal action to compel the manufacture and sale of these sorts of cars, which they assure us perform so splendidly and can be so wildly profitable for both buyer and seller that only some sort of inexplicable insanity explains their absence from car lots all across America. This “Neo-Cons for Neo-Cars” alliance is picking up steam and is increasingly embraced by all sorts of smart opinion leaders who can barely program a VCR, much less design an engine.

An invaluable reality check, however, can be found in the Sunday New York Times. There, reporter Lindsay Brooke notes that, while automobile companies are busily developing plug-in prototypes, there remains one little problem - the battery necessary to make such a car go from here to there has yet to be invented. While the industry is optimistic that something will come along in the near future, industry executives confess when pressed that the cars would be so expensive to manufacture that they probably wouldn’t sell without government subsidies or consumption mandates.

Why are Neo-cons and other assorted hawks so obsessed with automotive powertrains? My guess is that they fear U.S. foreign policy is being terribly constrained by our need to import oil. Plug-in hybrids would liberate the country from worrying about how our actions play on the Arab street, freeing Uncle Sam to act even more uninhibitedly around thew world.

Look, if the auto industry wants to make these things and consumers want to buy them, fine with me. But before we start bossing Detroit or their customers around and turn over automobile manufacturing to the very same crowd that manufactured the war in Iraq, consider yourself warned.